Suning Appliance Co has raised 2.43 billion yuan (US$350 million) by issuing 54 million shares to six institutions for outlet expansion.
The money will be used to open 250 outlets nationwide and a logistics center in Shenyang City, capital of Liaoning Province, and to buy facilities for two flagship stores in Shanghai and Wuhan, the Nanjing-based retailer said in a statement to the Shenzhen Stock Exchange yesterday.
Suning expected the new outlets would generate 18.63 billion yuan in revenue annually. Last year, the retailer's revenue gained 53.48 percent to 40 billion yuan and net profit rallied 93.42 percent to 1.47 billion yuan.
China Asset Management Co subscribed 20 million shares at 45 yuan apiece, followed by GF Fund Management Co, Penghua Fund Management Co, Rongrong Fund Management Co, ICBC Credit Suisse Asset Management Co and Citic Securities Co.
The lockup period of the shares will last for one year, the China's second largest appliance retailer said.
Suning had 662 outlets across the country by the end of the first quarter, adding 32 stores into its network during the period. It said it was confident of opening 200 more this year. "Suning is in quick expansion and issuing new shares can help ease its capital pressure and speed up its development," said Huatai Securities Co.
Suning has begun construction of five logistics centers and is choosing locations for four more. The company runs large logistics hubs in Beijing, Hangzhou and Nanjing.
It aims to overtake its rival Gome Electrical Appliance Holdings Ltd to become the largest home appliance chain on the Chinese mainland within three years and also hopes to expand beyond the mainland in 2010.
(Shanghai Daily May 23, 2008)
